Immediate action required for Luxembourg subsidiaries of foreign qualifying multinational companies

On the 13th of December, the Luxembourg parliament voted in favour of a law on country-by-country reporting (CbCR).

The conditions for a Luxembourg tax resident company to be subject to CbCR are the following:

  • A Luxembourg tax resident company should be part of a multinational enterprise group having an annual total consolidated group revenue of at least €750 million.
  • As a general rule, in order for a Luxembourg tax resident company to have to file CbC reports, it should be the ultimate parent of a multinational enterprise group. A Luxembourg tax resident company has the obligation to file CbC reports in other cases, inter alia if the ultimate parent of the multinational enterprise group is tax resident in a jurisdiction which does not have an agreement with Luxembourg providing for an automatic exchange of CbC reports.
  • In case the Luxembourg tax resident Company is a subsidiary of a foreign reporting company, it has the obligation to communicate to the Luxembourg tax authorities the identity of the ultimate parent and the jurisdiction where it is a tax resident by 31 December 2016. Whilst we expect some flexibility as regards the deadline, we advise all clients to react as soon as possible as the fine can go up to €250,000.